F. Duane Ackerman

What it is:

F. Duane Ackerman is the former CEO of BellSouth Corporation from 1997 to 2006. He was also chairman of BellSouth from 1998 to 2006.

How it works (Example):

Born in Florida in 1943, Ackerman joined the BellSouth customer service department after graduating with a physics degree from Rollins College, where he is now a trustee. He earned an MBA from the Massachusetts Institute of Technology in 1978.

Now retired from BellSouth, Ackerman sits on the board of the Allstate Corporation(NYSE: ALL), The Home Depot (NYSE: HD), and Wachovia Bank. He also served as the COO of United Parcel Service (NYSE: UPS).

Why it Matters:

Ackerman’s sale of BellSouth to AT&T (NYSE: T) marked a full-circle chain of events involving one of the largest antitrust events in American history.

BellSouth was one of the Baby Bells, which were telephone companies created after the U.S. government required AT&T to divest assets in 1984 as part of a settlement with the Department of Justice for violating antitrust laws. In particular, the settlement required AT&T to divest its local exchange service operating companies. These companies -- the “Baby Bells” (AT&T was “Ma Bell”) -- were Ameritech, Bell Atlantic, BellSouth, NYNEX, Pacific Telesis, Southwestern Bell and US West. They were largely organized along geographic lines.

Over the years, the Baby Bells merged, acquired each other, changed their names, or discontinued their operations. As a result, AT&T has, through various means, reacquired four of the Baby Bells since the 1984 breakup (Ameritech, BellSouth, Pacific Telesis and Southwestern Bell).

AT&T’s purchase of BellSouth, one of the largest Baby Bells, was particularly interesting and occurred under Ackerman’s leadership. BellSouth had entered a joint venture with the former Southwestern Bell Corporation, SBC, to launch cell phone provider Cingular Wireless, which became the nation’s largest cell service provider at the time. When AT&T acquired SBC in 2004, it found itself competing with BellSouth in the same geographic areas. AT&T became motivated to purchase BellSouth in order to have more control over Cingular and vanquish the competition in the BellSouth region for landlines.

The story of the Baby Bells is a textbook example of the effect of antitrust laws in the United States. Before the breakup, AT&T controlled virtually all of the telecommunications in the United States. It was at one point one of the largest companies in the world and employed hundreds of thousands of people.

Many historians debate whether the breakup spurred innovation in communications technology, but it is clear in many respects that the breakup soon led to the Baby Bells competing with AT&T to provide long-distance service, which in turn laid the groundwork for the wild and rapid evolution of the Internet, wireless and telecommunications industries in this country. The breakup spawned competition in cable television, cell phone service, wireless communication services, and even VoIP. Duane Ackerman was part of a core group of CEOs and executives who made this happen.

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